‘Abject dereliction of her duties’: Selena Gomez accused of fraud by investors of her failed mental health business — how celeb startups go wrong

On the official website, the brand describes itself as “The World’s First Mental Fitness Ecosystem.” Translated, they provide informative articles with advice on mental health topics, a newsletter, celebrity interviews, podcasts and worksheets.

Now, they’re facing a securities fraud lawsuit with investors alleging Gomez and Teefey made false promises to investors and then watched the company collapse in silence.

As per TMZ, two entities, Wondermind SRS 44 LLC and Bespoke Wondermind LLC, filed suit against Wondermind Global, Gomez, Teefey and Pierson. The plaintiffs are seeking unspecified damages, including the return of their investments which totalled more than $1 million.

The lawsuit described Gomez’s “abject dereliction of her duties” as leaving the company in a “state of financial calamity,” BBC reported.

What went wrong with Wondermind

The issues surrounding Wondermind came to light in 2025 when The Cut published an expose of the business. In it, they spoke to anonymous Wondermind employees who cited “Gomez’s and Teefey’s personal and family dysfunction” as the cause of the company’s demise.

“I will say this with the utmost certainty — no doubt, hesitation in my mind, Selena knew her mother was not well enough to be running that company” one anonymous employee told The Cut.

The plaintiffs and investors said that ultimately, they were misled. They were under the impression that Gomez herself would be playing a major role in this business as head of marketing, and that the business had the resources to become profitable. Pierson claimed she had secured partnerships with firms such as JPMorgan and Fidelity, but Business Insider reported that these partnerships did not exist.

Celebrity startups are a risk

It’s not just Gomez who has had a failed startup — there are plenty of other celebrities who fail to make their side hustles last. Blake Lively had a lifestyle and e-commerce website that only lasted from 2014 to 2015 and Natalie Portman had a line of vegan shoes that was discontinued within the same year it launched.

So, what is the poison ingredient making these celeb startups go sour?

According to Axia Public Relations, there are a couple common causes. One is what they refer to as the “white label wasteland issue.” This is what happens when celebrities put their names on pre-existing formulas created by third-party manufacturers. Because these products don’t have any actual uniqueness to them — besides a famous name on the label — consumers lose interest quickly when they realize they can get the same thing for a cheaper price without a celebrity endorsement.

Axia also cites “ghost founder syndrome” as a common reason why these companies fail. Ghost founder syndrome is what happens when the initial launch of a company heavily involves the celebrity founder but as time goes on they fade into the background and the hype dies down as their identity becomes less entwined with the business itself. This might be part of what led to Wondermind’s demise as Gomez left her mom to take charge of the business and was promoting other things (if that is what happened). Still, ghost founder syndrome doesn’t account for the poor management of which the company is being accused.